Italy's newest carrier, ITA, has announced some big plans. In addition to taking over many of Alitalia's assets and building up a route network with plans for growth through 2025. As ITA expands and rebuilds a national carrier for Italy, it has now publicly stated it is looking to join the SkyTeam alliance and identify a close "Strategic Partner."
ITA plans SkyTeam membership
ITA, which launched on Friday, is looking to join the SkyTeam alliance to power its international growth. The airline will need to undergo a formal application process and meet strict criteria for entry. However, given that the alliance has not seen a new member join in several years, there would likely be some jubilation surrounding adding an alliance member, even if it is a successor to old member Alitalia.
The SkyTeam alliance has no members in Italy. Its largest European airline is Air France-KLM. Other European members include Czech Airlines, Air Europa, and TAROM. Czech Airlines is undergoing a restructuring while Air Europa is in limbo with the proposed acquisition by the International Airlines Group (IAG), which is the parent company of oneworld carriers including British Airways and Iberia.
As such, adding ITA would shore up SkyTeam's position and relevancy in the airline world. If both parties see benefits, then ITA would likely be cleared for entry. It is already working on building a frequent flyer program with four tiers, which is the foundation for allowing reciprocal elite benefits.
Strategic partners: some key airlines
Within the SkyTeam alliance, there are some strong partners. Delta Air Lines, the US-based SkyTeam carrier, has close partnerships with several airlines, including Korean Air, Air France-KLM, Aeromexico, and China Eastern Airlines. Delta used to have a strong partnership with Alitalia as well.
Air France-KLM and Delta are two strong contenders for a partnership. ITA has plans to add Amsterdam and Paris to its route network. In addition, the United States is going to be a heavy focus for ITA, and a partnership with Delta would be crucial to adding connecting feed for ITA's flights from Boston, New York, and in the future, Los Angeles.
The Italy-United States market is a crucial one for airlines. With Alitalia's demise, some airlines have capitalized on the fall. A key example is United Airlines, which is planning on serving Milan, Venice, Rome, and Naples nonstop from the US. It is even adding a new flight between Chicago and Milan in time for next summer. Delta also added a new Boston-Rome connection during the crisis.
While ITA is taking over plenty of Alitalia's assets, it is not taking over Alitalia's frequent flyer program, nor is it necessarily capturing a strong brand presence. ITA is also coming in with far more limited flights to the US than Alitalia.
Delta has a history of also turning to joint venture agreements, which means revenue-sharing, metal-neutral cooperation that can be a huge boon for both airlines. The existing transatlantic joint venture Delta has includes Virgin Atlantic in the UK and Air France-KLM. Alitalia was formerly part of the joint venture agreement.
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Alitalia looms large
What is abundantly clear so far is that ITA and Alitalia share more similarities than differences. While ITA will have a slimmed-down fleet, workforce, and route network compared to Alitalia, it is taking over some of its fleet and route network. It also has the Alitalia branding, but it is launching its own distinct livery.
The Alitalia brand had a strong presence in Italy and the United States. However, it made some missteps. It faced a rough financial situation that went through billions of euros in bailouts and loans.
Alitalia's history looms large over ITA. While ITA seems to be taking a few pages out of Alitalia's operating book, it has plenty of work cut out for itself. Alitalia's hard and soft product was lacking, and comparing this to products that United, American, Delta, and Emirates are putting nonstop between the US and Italy, and ITA has some headwinds amid a celebrated launch.
Of course, Alitalia has had a long history in the market. It has served Italy well for years, serving as the country's flag carrier. With its partnerships, the airline has also been able to offer Italians an extensive array of itineraries.